One of the criticisms of politics and punditry today is that it often gets caught up in the tyranny of the impractical — ideas that sound good but may not take flight in the real world.
With this in mind, the WhoWhatWhy podcast is always seeking to expand our horizons to include conversations with smart people who have to make hard decisions and solve real problems every day because their livelihood depends on it.
This week we welcome a voice you may know, but a story you probably don’t. That is George Zimmer, the founder of Men’s Wearhouse.
Zimmer grew up appreciating the power of business, not just to make money but as a force for good in the world. Zimmer talks about how presenting his authentic self was the only way he could imagine making his business work. It’s how he treated his employees and how he became the spokesperson for his company and for what he calls stakeholder capitalism.
Often in the face of internal corporate opposition, and at risk to career, he ran a business that was consistent with his values. In so doing he made a difference in people’s lives, while he radically transformed the retail clothing business for men, and built a global business from a single store to a 1,200-store public company.
You are going to like this podcast… I guarantee it.
Full Text Transcript:
(As a service to our readers, we provide transcripts with our podcasts. We try to ensure that these transcripts do not include errors. However, due to a constraint of resources, we are not always able to proofread them as closely as we would like and hope that you will excuse any errors that slipped through.)
Jeff Schechtman: Welcome to the WhoWhatWhy podcast. I’m your host, Jeff Schechtman. One of the criticisms of our politics today is we get caught up in the tyranny of experts. People both inside and outside of government are comfortable with seeing the world and its problems in a particular way. It seems, at least these days, that this hasn’t always worked out so well.
With this in mind, WhoWhatWhy podcast seeks to expand our horizon to include conversations with smart people who are entrepreneurs, community leaders, and long-established businesspeople who have to solve problems every day simply because their livelihood and their business depends upon it. We begin today with a voice you know but a story you probably don’t. That is George Zimmer.
He’s the founder of Men’s Wearhouse. He radically transformed the retail clothing business for men and built a global business from a single store to a 1,200-store empire. Since then, he’s launched other businesses, explored sports ownership, and, from his home base in Northern California, evolved some strong views about politics, the media, government, and our society at large. It is my pleasure to welcome George Zimmer to the WhoWhatWhy podcast. George, welcome to the podcast.
George Zimmer: My pleasure, Jeff.
Jeff: Talk a little bit first before we get into so much of what you’ve accomplished. Tell us a little bit about your early years, about growing up in New York, your family, etc.
George: I was a pretty average kid. I was born in New York City in 1948. And, when I was four, my parents were able to move to Scarsdale because my grandfather put down a $5,000 down-payment on a 299 Scarsdale home. So we lived up there when my younger brother and sister joined the family. I had a pretty normal, uneventful childhood and was fortunate enough to travel around the United States on what was then known as a team tour.
And that was one of the most enriching activities that I did before I went to college, which I did when I was 17 and went to Washington University in St. Louis to some degree with my tail between my legs because I was leaving the East Coast to go into the hinterlands and turned out to have been the best decision I ever stumbled into in my life.
Jeff: What was the most memorable part of making that transition from New York and Scarsdale, where you had grown up, to suddenly being in heartland America in St. Louis?
George: I do remember that my mother flew with me to college to help set up my room, but I also remember that I was excited for her to leave so I could get on with being an adult in a new environment.
Jeff: And St. Louis itself, it was certainly a place that was far different from what you knew. What did you take away from that? What did it teach you right away?
George: It taught me initially the type of advantage that I had had in childhood. In the book I wrote, I think I refer to that as a fortunate son because I was quite fortunate, not only in normal childhood activities like playing football, tackle football in grade school, and playing baseball until I started high school. And it was a pretty normal childhood. I had four grandparents that were alive during my childhood. And so I had, including my mom and dad, six adult role models from whom I could extract the best of all of them.
Jeff: And to what extent do you think that that experience and making such a big move at a young age and getting a broader look at the country and even the team tour you talked about really set you up for a better understanding of people that will ultimately be your customers and what they want and how they think and how you dealt with them, and how might it have been different if you just stayed in New York?
George: Yes, I think that’s a good question, Jeff, because it’s a relatively unexplored aspect of my life and my later success. And I think it is attributable both to the team tour and going to St. Louis for college, and then I would include going to Hong Kong after college for my father. And so, those three experiences, including, of course, growing up in the New York area, did position me, I think, well for future success. There is that saying, “If you can make it in New York, you can make it anywhere.” And to some degree, that’s true whether it’s business or driving.
Jeff: Especially driving [chuckles]. Did you always know that even if you didn’t know what it might be, particularly when you were in college, I guess I remember you were an economics major, did you already know you wanted to start some kind of business that you had this entrepreneurial instinct?
George: I may have had hints about it, but I never had any burning desire, and I’ve had my own children. And one of the things I’m very careful about is not imposing on them this idea that they should know what they want to do in high school or college because I don’t think I knew what I wanted to do. I think you have to prepare yourself, and you prepare yourself mostly, in my opinion, through failure because it’s hard to learn from success. So failures you have when you’re young can prepare you to deal with the larger world as a successful adult.
Jeff: Did you have failures when you were young?
George: Oh, sure. Everybody does, right? I don’t like to think about them, and talk about them but nothing that would rise to the level of trauma. Just normal everyday ups and downs.
Jeff: Talk a little bit about your journey from the time you graduated from college. And you said you went to Hong Kong for your father, and I think you were in Texas for a while. The journey between that and opening the first store, the first Men’s Wearhouse store, in ’73 in Texas.
George: I came back from Hong Kong close to election day ’72. Actually, I came back at the beginning of that summer and then started the Men’s Wearhouse in August of ’73. I was only 24 years old when I opened the first store.
Jeff: What was your vision at that point? Was there one? You wanted to open the store. What did you imagine?
George: The vision was that I was going to give business a chance because my father had been in business. And, although I didn’t agree with many things he did in business, I decided I would give it a chance before I became a full-time hippie. And I wasn’t sure it was going to work, but I had the opportunity to experiment and try things, knowing that if it didn’t work, I could just go live on the beach someplace.
Jeff: And it worked right away. It took time to work. Tell us about that after the first store opened.
George: Oh, no, it took many years. It wasn’t until ’81 that we opened a market outside of Houston, and it wasn’t till ’92 that we went public on the NASDAQ. So I would say that the 40 years I spent at Men’s, about half of it was as a private company where the only people who got paid on time were the employees and the landlords and the utilities in 20 years as a public company where a part of our leverage was our ability to pay on time.
Jeff: Before you were a public company, the business of building a business, we hear so much talk today attacking business and people that are successful in business sometimes. And I don’t think that the public really understands the scope or the depth of what it takes to build a business as you did.
George: Well, the word that comes to mind, although there are many, but the word that comes is “resiliency” because, when you’re building a company, there are numerous ups and downs. And you have to be able to adjust and react appropriately, or you don’t get the opportunity to be a public company later on. Focusing on those first 20 years, what I would say is, number one, it was 20 years in the modern world. People would think that was a lifetime.
And, in fact, it’s about a quarter of a lifetime. And it’s often necessary to create something that has inherent value as opposed to superficial market value, and that can be generated in many fewer years. So that’s the first thing. And I would say that the corollary to that is that you better be enjoying what you’re doing because it’s not going to be an overnight sensation.
And you’re going to have to stay with it for, in my case, two decades before the combination of our doing the right things, and the market being appropriate for our IPO. It took about 20 years. In the world of SPACs today, people aren’t going to wait 20 years. [SPACs are special purpose acquisition companies — publicly traded companies that exist purely to raise money and acquire an existing private company.] And, in fact, my new company, Generation Tux, is quite successful now. We’ve been in business six years, and we’re already talking about private equity and then going public, possibly as early as 2024.
Jeff: When did you know that you liked what you were doing, that you wanted to stay with it, that you weren’t going to go back and be a hippie on the beach, anymore?
George: Well, I knew pretty much right away. It took about 18 months for it to solidify. But I guess what I learned about myself is that when I commit myself to a project, I’m all in. So I never, in the entire 40 years that I was there, thought that I was ever going to do anything except Men’s Wearhouse. So, when I was fired eight and a half years ago, it came as a bit of a surprise and left me in this awkward position of having committed everything that I had and everything that I was into the Men’s Wearhouse, the relationships with hundreds if not thousands of people, and not to mention my public persona on TV.
But, from the very beginning, literally, the first week, I knew that I was resonating with being the master of my own dreams and that, regardless of ups and downs, I liked being the person in charge of my life without a parent or a teacher or even a mentor involved. I liked the feeling of managing my own affairs.
Jeff: In those 40 years, because this really is a segue into so many things that did interest you today, the way in which during those 40 years as a marketer, as having 1,200 stores all over the world, did you have to stay very closely in touch with how the world was changing, how the market was changing, how politics was changing? Talk about that.
George: I’ll give you two examples. One was Occupy Wall Street, which, as you know, started about 10 years ago. And the Men’s Wearhouse had a store down by Wall Street, and it was across the street from Zuccotti Park, where the original Wall Street demonstration took place. And I was a supporter of the idea of Occupy Wall Street, which was mostly about income inequality.
And, to make a long story short, I was on a trip to New York and the board of directors literally begged me not to go into the park because they realized that everybody had a cellphone and a camera and that they would take my picture if not a video. I was a proponent and so they knew this was a bit awkward for me. The other example is, and I just came from it last Friday, we had a 25-year reunion for Prop. 215, which was the medical marijuana initiative in 1996, which passed with 56 percent of the state voting board.
And so, all of a sudden, we went from Reefer Madness to medical marijuana and I was one of the early supporters of that. And, as a public company CEO, it was at least as difficult as being a public company CEO supporting Occupy Wall Street. There was an entirely different attitude 25 years ago to marijuana and 10 years ago to income inequality, but that, I hope, answers your question.
Jeff: What were the pressures on you within the company, within Wall Street, within the business community to not get so involved in controversial issues?
George: I think that the beauty of my former position is that I was the founder of the company, the original investor in the company, the television spokesperson for the company, the CEO, and the chairman of the board. So people could express their opinions because we were a public company, but I was confident enough that I would listen respectfully to what people said. But I recognized that it would be impossible for people on a public company board of directors to understand why the CEO of the company would endorse Occupy Wall Street or medical marijuana, and so we agreed to disagree.
Jeff: With respect to Occupy Wall Street, it really was part of a global way that you look not just at the world but at your employees, at your businesses because you always had a deep concern for your employees, and how they were doing.
George: I call it stakeholder capitalism as opposed to shareholder capitalism. We live in a world of shareholder capitalists where the job of the CEO is to maximize shareholder value. And I always thought that the job of the CEO was to balance stakeholder interests, which, of course, means you recognize the role of the shareholder, and you’re cognizant of the fact that you ultimately have to generate shareholder value. Let me give you an example.
George: Right before I was fired, I had found a company that wanted to take Men’s Wearhouse private and would offer a 30 to 40 percent premium to our stock price in doing that. And when I said that to the board of directors, instead of standing on the chairs cheering, they got very nervous. And I had not even realized that they assumed that most of them would lose their job and, therefore, their incomes, which was not insignificant. And so they saw me as persona non grata instead of the shareholders’ champion.
Jeff: And talk a little bit about how you see that attitude today in the context of the political debates, the economic debates that are taking place now. In many ways, you were ahead of the curve on this.
George: Oh, yes, no, I feel I was ahead of the curve. And part of the reason why the Men’s Wearhouse was so successful was that, unlike other companies that would screw everybody if it would generate an extra nickel for shareholders, we made decisions every week in which we spent money that was not an obligation. But we did it because it was the right thing, either on our workforce or our marketing or our real estate locations or our profit-sharing plan or our medical plan. We were always making these decisions.
And that’s why, for the board of directors who were essentially 10 mostly lawyers without real retail experience, they had the audacity to terminate me, and I remember saying to them: “Did any of you call any of the stores?” Because I knew that the store personnel would just be freaked out. And, of course, none of them had called any of the stores because these are mostly high school-educated people. They were not organized enough to demonstrate their displeasure with the decision. And so, about five years after they fired me, the company went bankrupt.
Jeff: Talk about where these views, this idea of stakeholder capitalism, and the concerns that you’re talking about that, as we say, we’re in many ways ahead of the curve. Where did they come from? How did they evolve with you?
George: Well, my mother was an orphan, and she was very philanthropic throughout her life. My father had been successful, so she could be generous with her time and money and never have a paying job. And I think that she instilled that in me so that, as I built my own company, was because I’m a college graduate, I’ve been trained how to think, I was able to think about what I was doing in a nonselfish way probably because I had grown up in Scarsdale. And so to be selfish seemed redundant. I think that it just evolved into what became the Men’s Wearhouse.
But, when I look back on it, everything in my life pointed in this direction. Starting with when I was in fifth grade, I ran the school’s store, and this is in my grade school. I remember enjoying doing that even though we were selling erasers and pencils for between one and five cents. I enjoyed doing that. And, through most of my life, I can say that I’ve enjoyed what I’ve been doing. So I feel very fortunate to be able to say that. Everybody has ups and downs. I’m in my 70s. So, eventually, your parents die, but I’ve had a very blessed life, I would say.
Jeff: Talk about the culture that you try to instill at the Men’s Wearhouse, and you’ve touched on some of that. And the way in which you think that that culture and the atmosphere that you tried to cultivate created and helped drive the success of the business.
George: I can explain it quite succinctly and clearly, I think. I just was always known as George. And as long as people would call me George, and not Mr. Zimmer, I knew that the basic culture was intact. And I developed a reputation over a decade as being an authentic leader who the rank-and-file people could call on if a problem arose.
And I did from time to time reverse other decisions and reinstate people that had been terminated. And so I was not afraid of the bureaucracy or the hierarchy because I was the top of it. So I felt I could do the right thing regardless of what others thought, whether it was the board of directors on Occupy Wall Street or a district manager in Kansas City who got let go the day before the Christmas party and who I reinstated.
Jeff: How much of that culture is also reflected in the decision that you made early on to be the spokesperson for the company, to be the one out in front?
George: Yes, no, I think it is. Now, the reason I had the confidence to do that was because, in college, I had done amateur theater. So I had performed in front of thousands of people. I thought that was far more nerve-racking than performing in front of a few cameras. But, yes, it was connected to this sense of I was authentically the founder of the company and should have had the best understanding and belief in what we were doing, so I should be the spokesperson.
And as I have said before, when I came up with the ad lib of “I guarantee it,” it was, at the time, a hackneyed phrase that had lost most of its meaning. And it was because I repeated it for decades that it became powerful because it’s not in and of itself particularly powerful.
Jeff: Do you think business today, politics too for that matter, has lost authenticity — that that seems to have been drained out of it?
George: Oh, completely. I, myself, of course, I’m a progressive, and I love WhoWhatWhy. But, when I’m watching television, I am hard-pressed to decide whether I want to watch Fox or CNN or MSNBC because they are all so one-sided that it becomes impossible to watch and get an unbiased opinion.
Jeff: Talk about what you would like to see different in that regard, realistically, as someone that’s been in business and knows the limitations of moving organizations.
George: One of my regrets is that, ever since 1968 when Martin Luther King and Bobby Kennedy were assassinated, I have had a difficult time believing in the American government and the American system. That’s now a long time, so I do not think of myself as a typical 73-year-old. I go back to that we fought in Vietnam. And, just like in Afghanistan, we lost our way.
And unlike Afghanistan, there were an awful lot of American guys my age getting killed for what I would say is no apparent. And then we go into the election and reelection of Richard Nixon, Watergate, and on and on and on. I think that America has always been about taking care of the money to people. And it’s not that different today that we have our work cut out for us. I’m not sure, actually, what to do now.
Jeff: You mentioned 1968. In a more contemporary sense, what are the things that still aggravate you, that shape you, that really motivate you in terms of your concerns today about where things are going?
George: Well, let’s go back to Iran-Contra, which was right around when I started making TV commercials. It seems like a long time ago. We don’t need to go into the politics of it, but names like Ronald Reagan and Oliver North were connected to that. Then you go to the Clinton era in the ’90s. I met President Clinton a couple of times, both before Monica Lewinsky and after. He had been devastated by what had happened and the public humility of it all. And I thought he was a less effective leader after Monica.
But then, I do feel that, when the Supreme Court ruled on Bush v. Gore, that that was a point at which the Supreme Court became politicized, and that is going on right through the current era. And then, of course, Donald Trump is — I think he’s an anomaly. But because he’s such a powerful anomaly, I’m not believing that Trumpism is going to go away. I’m more inclined to think that the Republican Party is going to go away.
Jeff: Have you ever considered getting involved yourself, personally, in running for political office?
George: I used to when I was younger. But one of the things I feel today is that the Democratic Party at all parties, but I’m speaking of the Democratic Party, they need younger leaders. I’m worried that Joe Biden, who’s turning 79, and Nancy Pelosi, who’s about the same age, and Chuck Schumer, who is five years younger, that they’re just too old. And I put myself in that category as well.
Jeff: Thinking about that, when you talk to young people today, when you talk to them about the business you used to be in and the business you’re in now with Generation Tux and about politics, what do you come away with? What do you take away from the current generation?
George: I don’t really think that the average younger person, and I would say 40 and down, they don’t seem to be as well-read as people their age used to be. And that’s probably because of social media. We all know that younger people are more likely going to live off their parents’ wealth than create their own wealth. And I do have three children of my own, so one never knows. Like I said earlier, when I graduated from college, I got a job substitute teaching at University City High School for $20 a day. So I’m not really the person to criticize other people for lack of planning.
Jeff: Talk a little bit about starting a new business, which you mentioned earlier, at this point in your life, at this point in your career.
George: The truth is that if I was 73, I probably wouldn’t do it. I did it when I was 66 or 67, and that’s a little easier to do. But, yes, the company, after a rocky beginning, has turned into a — I describe it this way. It’s nice to be in the rental suit and tuxedo business without being encumbered by 1,200 men’s clothing stores, so the suggestion there is that this is a much more profitable business than Men’s Wearhouse. And so, as a stakeholder capitalist, I’m still a capitalist.
Jeff: And in many ways, your business today is as much a technology business as it is a clothing business.
George: It is. We have a technology team led by a guy with 12 people in his team. So, yes, we have tried all our technology.
Jeff: And how have you adapted to that? How do you like that?
George: Well, [laughs] I am not a technologist. When I started the Men’s Wearhouse, I had a fraternity brother by the name of Harry Levy who was a technologist. And, until the year 2000, he would explain what I needed to know to understand the technology that was being rolled out at Men’s Wearhouse stores. Even though technology has become a very powerful tool, I am a Luddite when it comes to technology. I don’t really understand other than I understand the way electricity runs at the speed of light, that I understand.
Jeff: How has the pandemic, the past 18 months, how did that affect your business? And what do you see as the long-term impact of that on a business like Generation Tux?
George: Well, it hurt our business 18 months ago or 20 months ago when they finally acknowledged that COVID was a problem. So there was about a 90-day period where there was so much uncertainty, and, I think, lockdown. And most of last year was disappointing because, as you know, the vaccines weren’t really introduced till the very end of the year. And they had started testing them in the second quarter last year, but none of us really knew that. But having said that, the bounce-back this year is beyond expectation. I’m talking about a 125 percent increase in sales or rentals, so it’s been enormous with a corresponding improvement in the bottom line.
And the plan for next year, which is really upon us, is for that to continue if not accelerate. So one of the things about the pandemic that I’m sure I’m not the only one to notice this, but we have all learned how to do more of what we do remotely. And you don’t have to be a nonessential worker to say that. Everybody is learning skills in that regard. And I think those skills are accelerating the move to what was once a dream of everybody being connected through the internet. And I think that we’re just beginning to experience the productivity boosts that that will create.
Jeff: And, finally, I want to talk about something that’s certainly been a part of all of your businesses, which is an understanding — I mean, this goes back to you deciding to be the spokesman and your instincts about the culture with the company, is an instinct for marketing, an instinct for how to connect with your customers, to bring in more customers, to connect with the customers you have, to really have that connection to people. And that seems to be something so missing from most of politics today.
George: OK, well, that’s an easy one, Jeff. What I do is I just try to be as authentic as I can be and trust that, regardless of what you may think of what I’m saying, it is who I am. So I can’t hide it. It is me. And I think that most people, politicians and pundits being the two that immediately come to mind, they have an ulterior motive. They’re not trying to be as authentic as they can be. In fact, authenticity may be counter to what they’re looking for because they’re managing expectations by what they say, so it couldn’t be more different.
Jeff: George Zimmer, I thank you so very, very much for spending time with us today.
Jeff: Alright. Thank you. And thank you for listening and joining us here on the WhoWhatWhy podcast. I hope you join us next week for another radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you like this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.